Banc of California now O.C.’s largest

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Banc of California acquired Popular Community Bank’s California branches, making it the largest bank based in Orange County. CEO Steve Sugarman ,who is originally from Fullerton, is shown at the Popular Community branch in Fullerton.

Banc of California acquired Popular Community Bank’s California branches, making it the largest bank based in Orange County. CEO Steve Sugarman is a Fullerton native.

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Banc of California acquired Popular Community Bank’s California branches, making it the largest bank based in Orange County. CEO Steve Sugarman is a Fullerton native.

Irvine-based Banc of California became Orange County’s largest bank Friday, with assets nearing $6 billion after the company absorbed Popular Community Bank.

The deal added 20 retail branches in Los Angeles and Orange County, $1.1 billion in loans and $1.1 billion in deposit balances. Banc of California raised $130 million of capital to fund the transaction.

“This acquisition has been in the works for the greater part of the year,” said the bank’s CEO and Fullerton native Steve Sugarman.

About 39 percent of its new branches are in Latino banking communities, including areas of East Los Angeles. To help connect the Irvine bank to the community, Banc of California called on former Los Angeles Mayor Antonio Villaraigosa, who acted as an adviser on the needs of minority groups looking to become home or business owners.

Villaraigosa said he joined the bank because he agreed with its focus on small businesses and homeowners. Since 2010, the bank has increased its loans to homeowners and small businesses by almost $5 billion.

Currently, three-quarters of homebuyers in Southern California have Latino or Asian surnames, he added, and 44 percent of small businesses in Southern California are owned by people born in foreign countries.

“In a state where the demographics are changing very dramatically – where merging underrepresented groups like Latinos and Asians are buying homes and starting businesses – our focus will be homeownership and small businesses in all communities,” said Villaraigosa.

The California Reinvestment Coalition and more than 40 other groups initially showed opposition to the acquisition, but have since decided to support it, said Paulina Gonzalez, CRC’s executive director.

“After meeting with the bank and coming to an agreement on community benefits that will ensure that the bank will serve the needs of the low-income communities, we have dropped our opposition,” she said.

The bank has agreed to commit 20 percent of its deposits to help the community and will invest in small businesses and make philanthropic contributions to low-income communities, Gonzalez said.

Gonzalez is hopeful more banks will commit to help underserved communities like Banc of California has.

Sugarman said the bank would now focus on growing its current locations instead of expanding. The banks will not see major personnel changes.

“By in large, we’re retaining the branch teams that serve those communities. We’re able to expand their capabilities with some of our lending programs, so it’s a really nice complementary relationship,” he said.

The company has added 1,300 employees in the past four years.

The bank recapitalized in 2010 and has since had a string of acquisitions. Oaktree Capitol Management will have 9.9 percent commitments in the latest venture and Patriot Financial Partners will increase its position by $10 million.

Before its recapitalization, the bank had $700 million in assets and $50 million in loans. Sugarman attributes the bank’s dramatic growth with filling a void in the community.

“There’s an incredible opportunity and need for banking and lending services in California,” Sugarman said.

“The number of banks that ceased to exist during the recent financial crisis left a huge void in this market and caused private business owners and homeowners an inability to find the financing they needed and deserved,” he said. “So a large part of our success has been filling the need and void in the market and understanding how to serve and how to lend to those agents of our economic growth here in Southern California.”

Hannah Madans, a USC graduate, has been with the Register since 2014. Her beat covers a gamut of subjects that include the robust retail landscape of Orange County, consumer commodities such as groceries, gas and cable, and the hospitality industry. In her time at the Register, Madans has written breaking news stories about Haggen’s fall in Southern California and backlogs at the Ports of Los Angeles and Long Beach. She has also written features on topics including tourism on Catalina Island, a helicopter pilot school at John Wayne and nobody's favorite subject: taxes. Madans also helps curate story and slideshow packages for the Register's voracious online audience.